Cleveland Browns owner Jimmy Haslam shakes hands with fans during an NFL football game against the Buffalo Bills Oct. 3. The Browns won 37-24. (Associated Press: DAVID RICHARD)

The Trucker Staff

10/10/2013

BRISTOL, Conn. — ESPN Legal Analyst Lester Munson, appearing this week on the network’s show “NFL Hot Read,” said 11 former Pilot Flying J employees have agreed to offer evidence for the Federal Bureau of Investigation as the FBI continues to investigate whether company CEO Jimmy Haslam, who is also owner of the Cleveland Browns, was involved in the alleged scheme to defraud customers who were due rebates.

“The FBI continues to work on this,” Munson told show host Gary Chow. “They are going through literally millions of pages of documents. They are interviewing and re-interviewing witnesses and sometime between now and February of next year we will find out whether Haslam himself will be charged in this massive fraud.”

Munson appeared on the show after the network published on its website Munson’s 2,500 word commentary on Haslam and his company.

Haslam has repeatedly stated he knew nothing of the scheme, and Munson acknowledged such during his interview.

“He says he knew nothing of what his sales people were doing,” Munson told Chow in answer to a question concerning potential legal ramifications for Haslam. “They

were cheating the customers on their refunds and rebates. If he is charged, it’s a very serious situation. There is so much money involved and it would be such as massive case that it would be the kind of charge that would absolutely certainly produce penitentiary time.”

Munson said in his article that seven of the 11 former employees had entered guilty pleas to fraud charges, and four have obtained immunity from prosecution in return for their cooperation.

“Late last month, federal prosecutors, in a major signal, arranged to postpone the sentencing of the seven to allow the FBI to continue its probe,” he wrote in the article. “The delay shows that the investigation is growing beyond earlier expectations, say lawyers and an investigator involved in the probe who spoke to ESPN.com on condition of anonymity.”

The court cases are now scheduled for a report to the judge on Feb. 3.

In the commentary, Munson relates a meeting where he said Haslam had ordered top executives of Pilot Flying J to come to a meeting at company headquarters in Knoxville, Tenn.

He brought in his national sales director, Brian Mosher, from Bettendorf, Iowa. He invited two top regional sales managers, one from Illinois and the other from Texas. And he included Mark Hazelwood, a lifer at the Haslam-family-owned Pilot Flying J, who had worked his way up to the position of company president.

“Despite the difficulties in the U.S. economy in general and in the trucking industry in particular, Pilot was doing well,” Munson wrote. “Its profits were steady even as its sales of diesel fuel were dropping. One of the first things Haslam did at the meeting of his top people was express his gratitude to Mosher for ‘saving money for the company,’ according to papers later filed in court. It was a strange thing to say to a sales executive who had no authority to cut costs and focused instead on increasing sales and company income.”

Both Mosher and Hazelwood are under FBI scrutiny.

In contrast to profits at Pilot Flying J, Munson noted in the commentary that 200 miles west of Knoxville, at family-owned Western Express, things were not so good.

The carrier was suffering a dramatic loss in income, dropping from $600 million in revenue in 2008 to $400 million in 2009, Munson wrote, adding that it was facing $4.5 million in default fees and penalties on loans that the previously successful company suddenly could not pay, according to papers later filed in court.

It seemed obvious to Western’s owners then in 2009 that their problems were a direct result of the recession, the commentary said.

“But, after a dramatic FBI raid on Pilot’s headquarters this past April and assertions from the government that Pilot was defrauding its customers by shortchanging them on promised discounts, the executives at Western have reconsidered. They now blame Pilot for their troubles,” Munson wrote.

“Western is one of hundreds of customers that, according to the FBI, were victims of ‘intentional and deceptive’ manipulation of discounts by Pilot,” Munson said. “When Haslam told sales executive Mosher at that meeting in 2009 that he was grateful for the money Mosher was saving for the company, Haslam may have been referring to Mosher’s reductions in rebates Pilot was paying to its fuel customers.”

Haslam for his part has remained in constant contact with the public through the news media and through rebateeducation.pilotflyingj.com, a website the company set up to provide information about the rebate investigation.

Haslam said during a media session Sept. 30 he was confident that the company would emerge from the current investigation of alleged fraud by its sales staff “an even better company, a company made up of people committed to providing the best service in our industry to America’s professional drivers and the motoring public.”

Citing pending legal action Haslam did not take questions.

“Since April 15, we have done our best to investigate the allegations made against some members of our diesel fuel sales team to identify any wrongdoing and to assure our customers that we will not tolerate that kind of behavior anywhere in our company and we will make right 100 percent any errors we discover,” he told reporters.

Although he said he could not be specific, but could generalize that “we are finding discrepancies in a relatively small number of our almost 7,000 diesel fuel sales customer accounts audited, and that the amount we’ve paid to correct those discrepancies represents a very small percentage of our overall diesel fuel sales.”